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  1. #2461
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    ........add some heavy rain to the equation and I think you might just be right QF.............back to 60c before you know it! I dont pretend to be an expert in such matters but the report seemed to be indicating a fresh start from a steady baseline for PGW.......all indicators are pointing northwards. In my opinion now is the right time to buy into this turnaround story.......rain baby rain!!
    Have a Gr8day.

  2. #2462
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    Quote Originally Posted by Snoopy View Post
    Hoop you are now on record as the second most intelligent PGW investor on the forum, second only to our old mate Winner who sold the balance of his holding at 45c shortly after Agria took the rest of his shares at 60c. My own shares still owe me 60c, so I am right down there on the PGW IQ scale.

    Take my $7.4m calculation of operational normalized earnings, then multiply that by the profit prediction fudge factor for PGW of 3 and we are looking at $22m NPAT for the year. Divide by the 754.8m share on issue and you get earnings of 2.9cps.

    At 41c share price this put PGW on a prospective PE ratio of 14. You would have to say a full recovery of seed sales and profitability in Australia is already factored in at that price. Just as well farming is such a certain business that these high PE ratios are possible, but now expected (see FSF). ;-P

    SNOOPY

    discl: delirious shareholder
    Thank you for those very kind words Snoopy...My head swelled a few more centimetres...time to get wider doors for the house.

    As for PGW I agree with Percy (#2780) I too think they have turned a corner... Snoopy, thanks for the very valuable analysis, it does seem the shareprice got overvalued and Mr Market is punishing every overvalued Company that reports less than Stellar results...eh?

  3. #2463
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    Quote Originally Posted by Snoopy View Post
    Winner, thanks and I accept your correction for term 'B':

    WC= (Inventory+Biological assets)+(Trade Payables-Trade Receivables)= ($239.4m+$20.7m)+($228.1m-$207.1m)= $281.1m

    So A = $281.1m/$980.5m = 0.287

    ----

    B= (Retained earnings/Total Assets)

    -$34.30m/$980.472m=-0.035

    --------

    C= (EBIT/ Total Assets) = $42.438m/$980.472m = 0.043

    --------

    D= (Market value of Equity/Total Liabilities) = (0.37 x 754.85m)/$402.698m = 0.694

    --------

    E= (Sales/Total Assets) = $1,336.8m/$980.472m = 1.363

    -------

    So putting everything together:

    Z= 1.2A+1.4B+3.3C+0.6D+1.0E
    = 1.2(0.287)+1.4(-0.035)+3.3(0.043)+ 0.6(0.694)+1.0(1.363)= 2.22

    Time to rerun my Altman test on PGW

    A= (Working capital/Total Assets)

    So WC= (Inventory+Biological assets)+(Trade Payables-Trade Receivables)= ($202.6m+$9.9m)+($239.4m-$272.5m)= $174.4m

    So A = $174.4m/$987.3m = 0.177

    ----

    B= (Retained earnings/Total Assets)

    -$29.655m/$987.272m= -0.030

    --------

    C= (EBIT/ Total Assets) = ($11.240m+($42.438m-$11.614m))/$987.272m = 0.043

    --------

    D= (Market value of Equity/Total Liabilities) = (0.40 x 754.85m)/$402.887m = 0.749

    --------

    E= (Sales/Total Assets) = ($589.120m+($1,336.813m-$693.710m))/$987.272m = 1.248

    -------

    So putting everything together:

    Z= 1.2A+1.4B+3.3C+0.6D+1.0E

    = 1.2(0.177)+1.4(-0.030)+3.3(0.043)+0.6(0.749)+1.0(1.248)

    = 0.212 - 0.042 + 0.142 + 0.449 +1.248

    = 2.009

    Not a good result. Altman Z says that PGW is closer to the point of bankruptcy than 6 months ago.

    SNOOPY
    Last edited by Snoopy; 04-03-2013 at 09:48 AM. Reason: Finish calculation
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  4. #2464
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    Quote Originally Posted by Snoopy View Post
    Not a good result. Altman Z says that PGW is closer to the point of bankruptcy than 6 months ago.
    There was a significant drop in the Agria share price overnight. Down 6.5% to 72c. Add in the post AGM share consolidation multiplication factor of 1.5 and we get share price of $1.08. Getting back down to that delisting risk zone of $1.

    It will be fascinating to see what card shuffling has been done to keep Agria afloat. The basic problem of Agria adding other layers of oversight management that so far, have not been value adding to PGW remains. PGW made a profit last year, yet Agria lost money because of management dead weight. If the performance of PGW deteriorates this year, and every indication is that it will, then Agria will lose even more money in FY2013.

    Agria have got a 2.2c ps dividend lifeline from PGW, but will it be enough? And what about the 'dividend guarantee' that Agria have promised shareholder 'New Hope'? How much of that dividend from PGW will Agria be allowed to keep?

    Agria repaid half of their NZ based loans and got an extension for the rest, albeit a punitive interest rates. Given they are cashflow negative, where did the money to (half) repay the loan come from?

    But Alan Lai says everything is still sweet, so everything must be hunky dory, right?

    So many unanswered questions, but hopefully soon the Agria half year result will supply some answers.

    SNOOPY
    Last edited by Snoopy; 05-03-2013 at 11:25 AM.
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  5. #2465
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    Quote Originally Posted by Snoopy View Post
    So putting everything together:

    Z= 1.2A+1.4B+3.3C+0.6D+1.0E

    = 1.2(0.177)+1.4(-0.030)+3.3(0.043)+0.6(0.749)+1.0(1.248)

    = 0.212 - 0.042 + 0.142 + 0.449 +1.248

    = 2.009

    Not a good result. Altman Z says that PGW is closer to the point of bankruptcy than 6 months ago.
    It is always dangerous to look at a number and assume that it tells the whole story. The Altman Z figure that I have just calculated is on a rolling annual basis, combining the first half results of this year with the last half results from last. PGW is a seasonal business and Altmann Z makes no allowance for this.

    I would imagine that at the end of June, PGW are building up their seed stock for spring.

    Sales to total assets are down. But this isn't unexpected as it could be explained by the balance sheet timing, as at 31st December 2012. A company might need to build up their seed stock before a late summer growing season (thinking Australia here). Likewise many supplies, like fertilizer. However, this theory is contradicted by inventory going down (from $239m to $203m) together with livestock on the books going down (from $20.7m to $9.9m - this last one perhaps more expected). Anyone like to hazard an explanation for this conundrum?

    SNOOPY
    Last edited by Snoopy; 05-03-2013 at 03:38 PM.
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  6. #2466
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    Quote Originally Posted by Snoopy View Post
    Not a good result. Altman Z says that PGW is closer to the point of bankruptcy than 6 months ago.

    SNOOPY

    Snoopy .... NO WAY ..... John and George are doing a great job I hear .... and that Crafar debt has been repaid

    Snoopy - you just get it do you ........... some will say stop this scaremongering

    Snoopy - maybe Mr Altman has to allow for seasonality .... his ratio will double in the 2nd half of the year

    Snoopy - can't be right .... they going to hand out $16m in divies


    Snoopy - for this post I score you 0 out of 10 ..... just for upsetting the status quo

  7. #2467
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    Quote Originally Posted by Snoopy View Post
    It is always dangerous to look at a number and assume that it tells the whole story. The Altman Z figure that I have just calculated is on a rolling annual basis, combining the first half results of this year with the last half results from last. PGW is a seasonal business and Altmann Z makes no allowance for this.

    I would imagine that at the end of June, PGW are building up their seed stock for spring.

    Sales to total assets are down. But this isn't
    Funny I said Mr Altamn needed a seasonality figure .... but 2 some extent you have by using a rolling 12 months

    Stocks might be high today in building them up but debtors might be lower than normal because of lower sales in the months leading up to December (compared to the 2nd half of the year)

    On balance might not make a difference

    Wonder what the score is if you take $16 mill of equity and cash for the dividend

  8. #2468
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    Quote Originally Posted by belgarion View Post
    Snoopy, W69 loves the Altman Z ... but it is woefully wrong in many instances. HBY anyone?
    ,,,,but HBY did something about fixing the problems eh Belg .... unlike the likes of Feltex who had similar scores

    as you know its all about probabilities and likliehood and all that sort of stuff .... not black and white yes it will happen

    Is PGW fixing things ...... sort off ..... are they fixing it fast enough ..... maybe .... or maybe not ..... but like HBY it will take some time to see what happen

    Low Altman scores are good buy signals if you have the faith in management to fix the problems .... otherwise it is a signal tom stay away and find other opportunities

    John and George may do the trick .... good blokes

    We'll both be happy when PGW is a buck or more won't we belg

  9. #2469
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    ....why is the friggn sp so weak?? Bugger.
    Have a Gr8day.

  10. #2470
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    Interesting this altman z analysis. I see it puts telecom and fletcher building at a 35 & 36% chance of bankruptcy respectively and our dear old struggling PGW at 43-44% chance. With some good fortune in Australia and South America for the second half of this year and a few other things in the mix...perhaps a more accurate assessment may see PGW in the thirty's also?

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